Caisse goes back to basics

Bertrand Marotte

Montreal —
Globe and Mail Update

Last updated Thursday, Aug. 23 2012, 12:22 PM EDT

Michael Sabia, Caisse de Depot CEO

The Caisse de dépôt et placement du Québec has gone back to basics in its investment strategy but will continue to play a leadership role in advancing the province's economic development, says chief executive officer Michael Sabia.

"We have regrouped around the basic functions of the Caisse and we have accelerated a plan of action to better manage risk," Mr. Sabia said Tuesday.

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"We have simplified our structures and investment strategies. We have moved away from complex derivative products," he said at a Caisse-sponsored conference on entrepreneurship in the changing global economic order.

He added that the Caisse - which posted huge losses last year in the financial meltdown, and was heavily exposed to the toxic non-bank asset-backed commercial paper market as well as high-risk derivatives, real estate and private equity sector - does not intend to retrench as a key player in helping boost the fortunes of Quebec companies at home and abroad.

"In Quebec, we have a very important competitive advantage, which we have to use: we know Quebec and its economy deeply.

That translates into the ability to produce solid returns for its depositors and thus does not present the dilemma of having to make a choice between promoting Quebec's economic development and seeking out the best returns, he said.

The Caisse has a dual mandate of both helping Quebec companies and producing the best investment returns for its 25 depositors, such as the Quebec Pension Plan.

"The two go together," Mr.Sabia said.

Mr. Sabia - who took over as president and CEO of the Caisse in March - also said today that the $120-billion public pension fund has several "projects on the table" that it will announce over the next few months.